COMPETENT STRATEGIC INFORMATION-ENABLED HEALTH REFORM
DISRUPTIVE INNOVATIONS THAT UNFREEZE THE OLD STAGNANT HEALTH SYSTEM LEADING TO NEW MORE COST-EFFECTIVE AND HIGHER QUALITY HEALTHCARE
Summay of Dr. Gruber's Book in Process
Healthcare Lags Industry in the Information Technology Revolution
Organizational Innovation: The CIO
Lessons from Industry
Dr. Gruber’s Prediction of Three Possible Outcomes for the Health System
Health Reform Imperative
1. Healthcare Lags Industry in the Information Technology Revolution
Lessons from the remarkable progress in the practice of INDUSTRIAL management, enabled by the information technology revolution applied in the commercial economy , are important resources in the transformation from a badly broken to a highly functional health system. The current excitement about the new digital economy has a history that dates back at least five to six decades. Renowned visionary Peter Drucker called his prescient book, THE AGE OF DISCONTINUITY (Harper & Row, 1969), an “‘early warning system, reporting discontinuities… are already changing structure and meaning of economy, polity, and society.” Professor Drucker noted the most important change in this age of discontinuity: “knowledge, during the last few decades, has become central capital, the cost center and the crucial resource of the economy.”
The early commercial use of the information technology revolution was primarily focused on the processing of accounting transactions. The power of knowledge to transform business was achieved when the accounting focus was replaced by competent strategic intelligence. Industrial sectors of the economy made this leap in information system power about three to four decades ahead of the health system. The industrial computer revolution transformation from accounting to strategic information, defined as ability to reshape the business and achieve competitive advantage, is now happening in healthcare in the 21st century.
2. Healthcare Transformation
The strategic information revolution was pioneered by company leaders in industrial sectors of the economy, such as banking, insurance, securities, and air transportation. Healthcare missed this transformation from accounting to strategic in the earlier stages of the information technology revolution but is now experiencing catch-up in the 21st century inflection point, direly needed and thus very timely. This is now an imperative for stakeholders in the United States healthcare revolution to reshape management competence with collaboration among the lead industry stakeholders and the federal government.
3. Organizational Innovation: The CIO
The late William S. Synnott, then responsible for information systems at the First National Bank of Boston, and I co-invented the Chief Information Officer (CIO) job title in order to bring information systems knowledge to executive decision makers. Between the 1970s and 1980s there was diffusion throughout industrial companies of the CIO concept enabled with Synnott-Gruber talks, conferences, teaching and consulting assignments.
In 2010 I was invited to give the keynote at the Sino-America CIO Summit in Beijing to update my work with the late Bill Synnott on our co-invention of the CIO. I was asked by the summit Chairman to open the conference with the keynote address on: “The new global environment of “complexity, discontinuity, and high uncertainty.” Healthcare is now experiencing an inflection in the strategic information revolution and is now in the transitional stage of exemplar progress in a context of high discontinuity.
Recognized healthcare leaders have a remarkable shared vision of an age of discontinuity in which there is a huge gap in competence between the “now” stage of broken healthcare and standards for future best practice. A new paradigm of management competence set a standard for a competent health system with strategic information as the core enabler.
4. Lessons from Industry
My book in process on COMPETENT STRATEGIC INFORMATION-ENABLED HEALTH REFORM is a projection of a future best practice that will enable the healthcare system to achieve the national goals of more cost-effective and consistent high quality healthcare. This book title includes the word “competent” to recognize that there has been significant incompetence in the earlier transitional stage from pre-industrial to industrial level of competence. Competence is tested by the shared vision, collaboration, and cooperation among multiple stakeholders and the government.
Lessons from the stages in the strategic information revolution were documented in my book co-authored with John Niles, THE NEW MANAGEMENT: LINE EXECUTIVE AND STAFF PROFESSIONAL IN THE FUTURE FIRM (McGraw Hill, 1976). We traced the progress from what we called Prior Firm, Present Firm, and Almost-to-Future Firm, to a forecast of a Future Firm level of management competence.
It is relevant to give emphasis to the date THE NEW MANAGEMENT was published, 1976. The progression stages from prior, present, almost-to-future, to future level of management competence forecasted in THE NEW MANAGEMENT was a projection of the future, not widely held at that time. Business education was largely case-based with little quantitative focus. Computers had not yet made the leap into competence when we forecasted the stages to Future Firm management. The imperative to be “research-based” was recommended in THE NEW MANAGEMENT because in “an age of discontinuity experience becomes less useful” (Drucker, 1969) for complex and important decisions. The concepts we take for granted in modern language, such as quant, big data analytics, and cloud, were central to our future vision we projected in the 1960s and 1970s.
The federal government has been a major source of innovation in the disruption of a historically static frozen health management system. Healthcare stakeholders and the federal government must learn to adapt to revolutionary change, ideally with collaboration toward a shared vision.
The United States has experienced a very sobering reality thus far in the 21st century. A timely message is the importance of forward thinking and adaptive to an age of discontinuity in which national interests should be given more weight in business, medicine, and government action. Hopefully, moving forward in the 21st century, our leaders in government and the private sector will see the importance of a “future competent health system.”
5. Dr. Gruber’s Prediction of Three Possible Outcomes for the Health System
The stakes are very high in this early stage of rapid progress in solutions to fix the broken health system. The future practice of the health system is now in doubt and faces the following three most likely scenarios.
Positive Projection (future competent health system): Health reform is now happening at impressive rate of progress with significant visible positive outcomes. In my future projection model of innovation diffusion between 2020 and 2050 there is an annual average savings of a half trillion dollars in national health expenditures, a total of $15 trillion over 30 years to be put toward other serious national problems.
Uncertainty (now happening): Speed of innovation, regulation, and complexity have created chaos in health system management that leaves a future outcome in doubt.
Political Pressure (chaos) drives the future outcome in this third scenario. Health system maturation into a future competence is in doubt. Political pressure might cause a precipitous delay and a loss of progress on innovations that have been achieved thus far with significant improvement compared with the current broken United States health system.
COMPETENT STRATEGIC INFORMATION-ENABLED HEALTH REFORM begins with a vision and then drills down into operational guidance for health system stakeholders. Powerful innovations were launched by the federal and state governments that were difficult to realize by health system stakeholders. Significant progress has been achieved in remarkable improvement from the baseline at the start of this revolution of the badly broken health system. In the first scenario we can project a remarkable new state. The second scenario is one in which positive and negative forces confronting the competence of the health system leave a positive outcome in doubt. There was strong political pressure to rescind the innovations that have been implemented thus far, including those in the 2009 HITECH Act and the 2010 Affordable Care Act. The third scenario is one in which chaos may result from a combination of political pressure and innovations that have been difficult for the stakeholders to manage.
6. Health Reform Imperative
Reform of the badly broken health system is one of the great opportunities but with serious dangers for the prosperity and viability of the United States. The unique characteristics of healthcare have created incompetence that has crowded out resources for other national challenges and also recover from the American shrinking middle class. The CMS acting administrator, Andy Slavitt, at the J.P. Morgan Healthcare Conference (January 11, 2016) recognized this in his presentation. He set these challenges as a future standard “It demands that we change our culture and execute with clarity, with discipline and with collaboration. Things we haven’t always been known for.” My expectation from the early experience of innovation in industry is that healthcare can learn from the experience over three decades ago when strategic information was successfully adopted in industrial sectors.
The United States health system truly has the potential to achieve savings in the trillions of dollars over the next three decades. This savings will potential fund progress on serious national challenges. There is a sober reality of national crisis of the shrinking American middle class, climate change, a crumbling transportation infrastructure, an economic system that fails to build competence in the new economy, and high risk of terror.
My motivation in the publication of this book and my future talks, teaching, and consulting will be a contribution to the realization of the high potential for the first scenario of successful competent health reform.
William H. Gruber, PhD